Once a condition in our contract is fulfilled, does it apply retroactively from when we signed?

Retroactivity to the day the obligation was created

When a conditional obligation to give something has its condition fulfilled, Article 1187 treats the transaction as if it had been unconditional from the very start: the effects retroact to the day of the constitution of the obligation. Practically, this means rights and obligations are measured from your signing date, not from the later date the condition happened to be met. Once fulfilment occurs, the law does not ask you to wait for that moment to matter — it reaches back and makes the obligation operate as though the condition had never been pending at all.

Fruits and interest while the condition was pending — two different rules

The article then addresses what happens to whatever the property produced while everyone was waiting to see if the condition would be met. If both sides owed each other something under the contract — reciprocal prestations — the fruits and interest earned during that waiting period are deemed to have been mutually compensated, meaning neither side has to account to the other for them. If the obligation ran only one way, the debtor keeps what was received, unless the circumstances show the parties actually intended something different.

Obligations to do or not do something are handled case by case

The automatic retroactivity described above is specific to obligations to give. For obligations to do and not to do, Article 1187 does not fix a single rule at all — it hands the question to the courts, who determine in each case what retroactive effect, if any, the fulfilled condition should have. That difference matters if your contract involves services or restrictions rather than a transfer of property: you cannot assume the same automatic back-dating applies, because the statute itself says this category is decided individually rather than by a fixed formula.

Only reaches obligations that were genuinely conditional

Article 1187 has nothing to do with an obligation that was unconditional from the outset — retroactivity is a consequence tied specifically to a condition existing and then being fulfilled. If no real condition was ever attached to what you promised each other, this article simply does not come into play, and ordinary performance rules govern instead, measured from whenever performance was actually due under the contract, not from some earlier constitution date.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Fernando Carrascoso Jr. vs. The Honorable Court of Appeals, et al, G.R. No. 123672, December 14, 2005 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1187 — Retroactivity of Conditions